Sistema Shyam narrows Q3 loss to Rs 495 crore

NEW DELHI: Telecom player Sistema Shyam Teleservices, which provides services under MTS brand, today said its net loss has narrowed to Rs 495.4 crore for the third quarter ended September 30 on account of favourable exchange rate of rupee.

The company, whose 21 licences are among the 122 cancelled by the Supreme Court, also said it is open to the idea of acquisition but will wait for the Supreme Court's decision on its curative petition seeking restoration of its licences.

The company had posted a net loss of Rs 1,009.7 crore in the same period a year ago.

On sequential basis as well, net losses were lower as the net loss in the second quarter stood at Rs 1,180.1 crore.

"The net income benefited due to improvement in OIBDA and also due to favourable movement in exchange rate resulting in recording of forex gains with respect to Long Term Foreign Currency denominated loans, as rupee strengthened against the dollar at the end of the quarter," SSTL CFO Sergey Savchenko told reporters here.

Sistema Shyam Teleservices (SSTL) registered an increase in revenue by 23 per cent at Rs 404 crore during the reported quarter compared to Rs 328.2 crore in the corresponding period last fiscal.

The revenue of the company, however, declined by 3 per cent from its previous quarter revenue of Rs 417.7 crore.

"In a seasonally weak quarter, revenues of SSTL were impacted. The revenues declined for the first time since the start of the company's operations," SSTL President and Chief Executive Officer Vsevolod Rozanov said.

Sistema's financial year is January through December. SSTL attributed decline in revenue growth on quarterly basis to "continued effect of TRAI changes in tariff structure" and "slowdown in subscriber acquisition activity".

The continued effect of changes in tariff structure made by Telecom Regulatory Authority of India (Trai) leads to drop in minutes of usage and average revenue that company earns from an user, the company added.

"The subscriber growth during the quarter also suffered on account of uncertainties in the operating environment and due to the predatory practices adopted by competition," Rozanov added.

The Supreme Court on February 2 had cancelled 21 licences of SSTL along with 101 other permits that were issued during tenure of then Telecom Minister A Raja in 2008.

Stating that it has been "unfairly penalised in the February ruling of the Supreme Court", the company filed a curative petition seeking to restore its licences.

SSTL is majorly owned by Russian Conglomerate Sistema JSFC and provides CDMA technology based mobile telecom services in the country.

Asked if the company was looking at acquisitions, it said it was open to the idea but will wait for the Supreme Court's decision on its curative petition.

"We may be interested in acquiring companies...but before any initial investment, we will have to see the current situation...But at this stage, I do not see any M&A until the decision of the Supreme Court," Rozanov said.